The dollar bloc currencies traded softer as a flare up in U.S.-China relations spoilt markets appetite for risk. The yen also steadied above lows while global stock markets stalled after Beijing threatened as yet unspecified "firm counter measures" in response to President Trump's signing of the Hong Kong Human Rights bill. A side theme of sterling firmness was also at play following a key poll showing PM Johnson's Conservative party to be on track to win its biggest parliamentary majority since the Thatcher era. AUD-USD declined for a second consecutive day, making a six-week low at 0.6759. The pair just needs to close out tomorrow below 0.6785 to rack this up as a fourth consecutive down week. NZD-USD also declined, while USD-CAD lifted to a two-day peak at 1.3299. Oil prices and many industrial commodity prices were also lower. USD-JPY ebbed back, albeit moderately, from the six-month high seen yesterday at 109.61. EUR-USD saw a sub-20 pip ranges, marked by 1.0998 on the downside, above the two-week low seen yesterday at 1.0992. As for the pound, Cable printed a fresh one-week high at 1.2951 before arriving at the London close near net unchanged at 1.2903-05. Amid the day's data and news, both the November ESI economic confidence survey for the Eurozone and Swiss Q3 GDP beat expectations, while Japanese retail sales dove 14.4% m/m, much worse than expected, even though markets had already been braced for weakness following a sales tax hike in Japan. In the mix was North Korea, which test fired two short-range missiles.

[EUR, USD]EUR-USD has continued to see narrow ranges, holding above 1.1000 and yesterday's two-week low at 1.0992. The low was seen following a batch of above-forecast U.S. data, highlighted by a 2.1% growth print in the second estimate for Q3 GDP. Incoming data has been, overall, showing the U.S. economy to be in a relatively good place, fitting of Fed Chair Powell's "glass half full" characterisation of earlier in the week. One dampener is the fresh souring in relations between the U.S. and China, with the latter threatening as yet unspecified "counter measures" after President Trump signed off on the Hong Kong Human Rights bill. In the Eurozone, confidence data over the past week showed some signs of stabilisation, the latest being today's November ESI survey, in the manufacturing sector, but the outlook remains fragile. We retain a neutral-to-bearish view of EUR-USD. The pair has been chopping around 1.1050 since early August, ranging from 1.0879 to 1.1179 over this period. The low marked a two-and-a-half year trough, the culmination of a bear trend that's been unfolding since early 2018, from levels around 1.2500. Momentum of this trend has been waning with the Fed having cut interest rates three times since late July, though markets have now priced out further Fed easing. The Fed's measure of the dollar's broad trade-weighted dollar is at near three-year highs. A continuation of dollar firmness, which we anticipate, would likely keep EUR-USD's bias to the downside. U.S. markets are closed today for the Thanksgiving holiday, which will be the start of a long "bridge" weekend for many market participants in the U.S.

[USD, JPY]USD-JPY has settled under 109.50, just below the six-day high seen yesterday at 109.61. AUD-JPY came under more acute pressure as risk appetite soured after China's threatened "firm counter measures" after President Trump signed off on the U.S. Hong Kong Human Rights bill. The biggest directional driver of the yen will likely to remain the ebb and flow of risk appetite in global markets. This will keep developments on the U.S.-Chine trade front will be front and centre. Assuming the phase-1 deal comes (eventually) to fruition, and with the U.S. economy enjoying what looks like a goldilocks economy -- growth slower, but still holding comfortably in positive expansion with inflation remaining benign -- then more upside would likely be seen in USD-JPY. In Japan, "Abenomics" has been getting a dusting down. Japanese PM Abe earlier in the month pledging a renewed push of fiscal stimulus, while BoJ Governor Kuroda reaffirmed the central bank's commitment to monetary easing to achieve its 2% inflation target (he admitted that "it's taking time").

[GBP, USD]Cable lost upside momentum after edging out a new now-week high (by 1 pip by our data) at 1.2951. The pair has since settled around 1.2930-40. The pound has also settled in narrow ranges above the highs seen late yesterday following the release of the YouGoc poll, a bellwether poll of 100,000 voters that predicted PM Johnson's party being returned to parliament with a working majority at the general election on 12 December. As we have pointed out earlier there are a number of reasons to suggest that follow-through buying will be curtailed. The YouGov poll matches the picture being painted by poll trackers, so the outcome shouldn't be a surprise, while it found the margins for victory to be less than 5% in 30 of the seats projected to be won by the Conservatives. Another is that the risks the UK devolving will likely ratchet higher in the event that Brexit is delivered. The realities of trying to strike trade deals in a more protectionist world may also start to hit home in the event PM Johnson's party takes the UK out of the EU.

[USD, CHF]EUR-CHF has settled at modestly softer levels after printing an 18-day high on Friday at 1.1010. Recent gains have returned the cross to the upper portion of a broadly sideways range that's been persisting over the last three months.

[USD, CAD]USD-CAD posted a two-day high at 1.3299 on the back of underperformance in the Canadian currencies amid a souring in risk appetite after China's threatened "firm counter measures" after President Trump signed off on the U.S. Hong Kong Human Rights bill. Oil prices were showing a loss over of over 1.5% from yesterday's highs in early London trading. The nine-day low USD-CAD saw last Friday at 1.3254 provides a downside focal point. The low was seen after BoC Governor Poloz stated that interest rates are "about right," which was taken as a partial walk-back of recent dovish signalling from the central bank. The 10-year U.S. over Canadian yield spread has been remaining in near lock-step since. At prevailing levels, USD-CAD is trading near to the midway point of a broadly, at times choppy, sideways range that's been seen since July 2018. More of the same looks likely.